Frontrunning the FOMC, November 2010

Wednesday, November 03, 2010 , , 3 Comments

Let me save everyone a whole lot of time and trouble postulating ahead of this afternoon's FOMC announcement as I already know what it is. Don't ask how I got my hands on this (I have my sources) but here goes:

Release Date: November 3, 2010
For immediate release

Information received since the Federal Open Market Committee met in September indicates that the pace of recovery in output and employment has slowed in recent months. PRINT FASTER, MOTHERFUCKER! Household spending is dismal and remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit, not to mention regulatory uncertainty and our problem with keeping the PRINT finger off the printing press. Business spending on equipment and software is way down, though less down than earlier in the year, and investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts are at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability maybe next week or next month or whenever we cash in that $50,000 in quarters we threw down the wishing well in the Board backyard, although the pace of economic recovery is likely to be modest in the near term. And by modest we mean fucked. Hard.

Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate. The Committee believes we can pretty much print money forever and as long as deflation doesn't set it, we are cool with it.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will look at changing this policy in 2012 and perhaps again in 2020 but expect us to keep the free money flowing for as long as you idiots will let us without throwing us all out and taking back your dollar.

The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate. Just because we are monitoring it doesn't mean we have any clue what we are doing but we are watching it and that's all you need to know.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh.

Voting against the policy was Thomas M. Hoenig, who judged that the economy continues to recover at a moderate pace. Accordingly, he believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted and will lead to future imbalances that undermine stable long-run growth. In addition, given economic and financial conditions, Mr. Hoenig did not believe that continuing to reinvest principal payments from its securities holdings was required to support the Committee’s policy objectives. He also thinks this printing money shit needs to stop. Now.

Update: Here's the real statement and surprise surprise, the fuckers are printing money again.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


chairmanben said...

Stale donuts and cold coffee for Hoenig!


Chris said...

Keep up the entertaining work. Enjoy your posts.

Mark S. said...

Hey, forget about inflating the currency out of existence. Are we not going to run out of paper soon? "Peak paper"?